OPEC Research Papers - Academia.edu (original) (raw)

OPEC has long been a major stakeholder and strong player in the global energy market, especially in the petroleum sub-sector. In recent time, however, there have been questions over the influence of OPEC in the sub-sector due to changing... more

OPEC has long been a major stakeholder and strong player in the global energy market, especially in the petroleum sub-sector. In recent time, however, there have been questions over the influence of OPEC in the sub-sector due to changing petroleum production landscape specifically as a result of the discovery of unconventional energy resources in North America and emergence of non-OPEC petroleum producing and exporting countries. This development could have significant effect on the global energy market and the macro-economy of OPEC member countries. The stationarity or otherwise of OPEC oil production/supply has important implications for determining whether fluctuations in OPEC market supply has temporary or permanent effect. Using the Zivot–Andrews structural break stationarity test and production data of OPEC member countries from 1980 to 2011, this paper investigates whether fluctuations in OPEC market supply has temporary or permanent effect. The empirical analysis shows that for only 5 OPEC members–Nigeria, Saudi Arabia, Ecuador, Kuwait and UAE—is the hypothesis of unit root rejected. This implies that for the five (5) OPEC members, the effects of shocks to oil production are not permanent and future pattern of oil production can be predicted following past trend. The practical implication of this finding is that OPEC production quota strategy may not have long-term impact on the global oil market. Thus, the cartel needs to improve oil production policy coordination among members and ensure strict adherence to production quota while also stressing the need for diversification in member countries.

Energy resources are transported long distances and create powerful interlinkages between countries. Energy thus contributes to the globalization of the world, but has received little attention in the globalization literature. This... more

Energy resources are transported long distances and create powerful interlinkages between countries. Energy thus contributes to the globalization of the world, but has received little attention in the globalization literature. This article hypothesizes that energy globalization is growing and accelerating. The hypothesis is tested by developing an index to measure changes in the extent of energy globalization during the 20-year period from 1992 to 2011. The following sub-indicators are included in the index: number of energy trade relationships, average distance of energy trade relationships, and energy dependency of the countries in the world. The development of the index encounters a number of conceptual and methodological challenges related to globalization, which, it turns out, have not been addressed properly in the broader literature. Clarification of these issues can help improve the analysis of globalization.

There is mounting evidence that global oil demand will peak between 2020 and 2040, supported by rational economics (inter-fuel competition and efficiency gains) and environmental policies. The perspective of a peak in world oil demand... more

There is mounting evidence that global oil demand will peak between 2020 and 2040, supported by rational economics (inter-fuel competition and efficiency gains) and environmental policies. The perspective of a peak in world oil demand poses a serious economic threat to petrostates whose GDP largely depends on oil export revenues. This article develops a repertoire of five possible strategies that oil-exporting countries can follow in a carbon-constrained world: quota agreements, price wars, efficiency, compensation, and economic diversification. The analysis suggests that the strategic behavior of oil exporters could yield important effects on climate policies, oil prices and related rents, the energy security of importers, and global geopolitics. The findings suggest that models of decarbonization and global energy security need to incorporate more explicitly the strategic behavior of oil exporters.

The International Renewable Energy Agency (IRENA), created in 2009, is the only intergovernmental organization dedicated to renewable energy. Drawing on several new datasets, this article explores IRENA in the context of three other major... more

The International Renewable Energy Agency (IRENA), created in 2009, is the only intergovernmental organization dedicated to renewable energy. Drawing on several new datasets, this article explores IRENA in the context of three other major international energy organizations: the International Atomic Energy Agency, the International Energy Agency and the Organization of Petroleum Exporting Countries. Through this analysis, several empirical approaches to comparing international energy organizations are tried out. Direct comparison between IRENA other international energy organizations is found to be problematic as each organization is different and comparisons inevitably encounter apples and oranges type issues. The study finds that IRENA's niche in international renewable energy governance is not yet fully carved out, but that the organization's mandate and institutional structure, as well as recent international developments, indicate that it may grow rapidly in importance.

The World Trade Organization cannot deal comprehensively with restrictive export practices maintained by energy cartels such as the OPEC. The main reason for this is the absence of competition rules in the multilateral trading system.... more

The World Trade Organization cannot deal comprehensively with restrictive export practices maintained by energy cartels such as the OPEC. The main reason for this is the absence of competition rules in the multilateral trading system. However, in spite of the fact that the WTO does not have rules on competition, it does provide for other rules, such as GATT Article XI on the General Elimination of Quantitative Restrictions. This article will take a law and economics approach and explore whether restrictive practices in the energy sector as maintained by OPEC could be caught by this article. It will analyse whether OPEC’s ‘monopolist market power instrument of choice’, namely the administration of production quota on petroleum, could fall within the definition of this Article. To this end, this contribution aims to understand the economic and legal rationales and functioning of both the WTO and OPEC.

This paper investigates the short and long-term determinants of Gulf Cooperation Council (GCC) stock markets' volatility. Since GCC countries are major suppliers of oil in world energy markets, their stock markets are likely to be... more

This paper investigates the short and long-term determinants of Gulf Cooperation Council (GCC) stock markets' volatility. Since GCC countries are major suppliers of oil in world energy markets, their stock markets are likely to be susceptible to change in oil prices. Given that change in oil prices influence observable factors in GCC economies, we show in this paper that unobservable speculative factors drive short term stock market returns. The influence of oil price change on GCC stock markets returns is evidenced in the long-term.† Long term is defined here as the period of time required for the effect of oil price changes to work out its way to influence major macroeconomic indicators that influence profitability of firms traded in GCC stock markets.

On the quest for reducing the fuel consumption per passenger per flight for economical and environmental reasons, commercial aircraft manufacturers are implementing new strategies for optimising aircraft performance by using new lighter... more

On the quest for reducing the fuel consumption per passenger per flight for economical and environmental reasons, commercial aircraft manufacturers are implementing new strategies for optimising aircraft performance by using new lighter and stronger materials and enhancing engines' efficiencies in terms of fuel consumption and maintenance requirements. With the rising and falling of economies, whether in the Organization for Economic Cooperation and Development (OECD) countries or other developing countries, the aviation industry has been affected by multiple factors such as passenger traffic, freight traffic, airport capacities and oil prices. Aircraft manufacturers have worked on improving the engine efficiency of their newly built airplanes (e.g. Airbus's A-380 and Boeing's B-787), and many airports in the world have increased the number of their runways to face the increasing demand for air traffic in the world. Aviation efficiency can also be achieved through better load management, which in return enables airliners to cope with higher oil prices or rising costs. Aviation fuel demand is modelled in OECD North America, Europe and Pacific regions and some selected developing countries. Price elasticities of fuel demand in all regions are low, while income elasticities are high. The elasticity of aviation fuel demand on passenger kilometre performed (PKP) is considerably low. One per cent increase in PKP leads to less than half a per cent increase in aviation fuel demand, confirming an ongoing fuel efficiency in aviation industry.

Current climate policy does not take into account that, after greenhouse gas emissions have been reduced to an extent that atmospheric concentrations stabilise and then start to fall, natural decay of greenhouse gases will lead to a... more

Current climate policy does not take into account that, after greenhouse gas emissions have been reduced to an extent that atmospheric concentrations stabilise and then start to fall, natural decay of greenhouse gases will lead to a global cooling phase ...

THIS PAPER EXAMINES the impact of changes in the United States dollar's exchange rate on the oil market. The discussion uses a partial equilibrium model to illustrate how disequilibrium in the oil market occurs, and how a new equilibrium... more

THIS PAPER EXAMINES the impact of changes in the United States dollar's exchange rate on the oil market. The discussion uses a partial equilibrium model to illustrate how disequilibrium in the oil market occurs, and how a new equilibrium may be reached when dollar exchange rates fluctuate.

In this study, we have endeavored to explain China's trade pattern with OPEC member countries by employing gravity model over the period 1990-2016. The estimation results demonstrate that the gravity equation fits the data pragmatically.... more

In this study, we have endeavored to explain China's trade pattern with OPEC member countries by employing gravity model over the period 1990-2016. The estimation results demonstrate that the gravity equation fits the data pragmatically. China was the first biggest oil importer worldwide with about 73 per cent of her oil coming from OPEC member countries. In fact, energy can be considered as the most traded commodity and also the core reason for the trade volume growth between China and the OPEC member countries in last two decades. We have confirmed that China " s bilateral trade with OPEC members positively impacts on GDP, income (GDP per capita), trade openness in China and the WTO member countries in OPEC. While negatively influence on distance (trade cost) and supports Linder hypothesis. Depreciation in bilateral exchange rates also negatively influence on China " s bilateral trade with OPEC. Contribution/ Originality: To the best of the authors " knowledge, this study is the first attempt to examine the China " s trade pattern with 14 OPEC member countries aver the period of 1990-2016 through gravity approach by estimation technique OLS and time fixed effects.